Marijuana News Today: Several Big-Name Pot Companies Top Short-Seller List
Marijuana News Today
In the marijuana news today, we have grim tidings for the marijuana stock market.
According to a new ranking released by The Globe and Mail, several big-name marijuana companies have landed on the newspaper’s short-sellers lists. (Source: “Short-sellers renew bearish bets on marijuana companies,” The Globe and Mail, June 15, 2018.)
The company listed five new pot stocks that have received renewed shorting interest, including: Aphria Inc (OTCMTKS:APHQF, TSE:APH), Canopy Growth Corp (NYSE:CGC), Auxly Cannabis Group Inc (formerly Cannabis Wheaton Income Corp) (OTCMKTS:CBWTF, CVE:XLY), MedMen Enterprises Inc (OTCMKTS:MMNFF, CSE:MMEN), and Delta 9 Cannabis Inc (OTCMKTS:VRNDF, CVE:NINE).
On the list are three stocks that readers will be familiar with: MedMen stock, Canopy Growth stock, and Aphria stock.
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Short-selling is a good barometer with which to gauge bearish sentiment developing within the investor community.
While there has always been a good number of shorts in the marijuana stock market–it comes with the territory when growth is as high as it is within the sector–whenever the numbers do increase, it is worthy of taking note, as that signals changing investor attitude.
Both Aphria stock and CGC stock were new additions to The Globe and Mail’s list. The two companies have suffered charges of overvaluation throughout the year, with Aphria stock in particular taking the brunt of the damage.
The stock has performed relatively weakly compared to a good number of other marijuana stocks. In fact, Aphria stock and CGC stock are in quite differing positions, with Canopy having had an overall successful 2018 despite the correction, while Aphria has had a much more volatile run and has been unable to sustain long-term gains.
Some of the other pot stocks on the list do show discomfiting numbers. For instance, Cannabis Wheaton, a financing group for marijuana producers, had a revenue of just over CA$600,000 in the last quarter, but still maintains a valuation of $700.0 million.
MedMen, meanwhile, is an American company that recently landed on the Canadian exchanges. While providing investors with an opportunity to gain exposure to the U.S. market, that hasn’t stopped short-sellers from taking issue with its CA$1.4-billion valuation.
Delta 9 Cannabis was one of the pioneers of the medical marijuana business in Canada, but has since fallen behind. The company is now considered one of the smaller niche stocks and has therefore been unable to keep up with the rapid expansion seen in other marijuana stocks.
With charges of overvaluation remaining frequent, short-sellers are going to be a recurring issue for the marijuana business.
With such rapid climbs we often see massive drawbacks, as evidenced by the correction that hit in 2018. But the marijuana industry has made people rich in a variety of ways, both through shorts and through long-term holds. It is, as always, a matter of timing.
While I do see several short-term falls in the future of the industry, I believe that the marijuana stock market will climb high in the summer, with a potential major correction hitting in fall before stocks once more balance out into gains to finish 2018.
As such, both short-sellers and long-term buy-and-hold strategies can work in the current marijuana market.
Marijuana News Today: CGC Stock
Courtesy of StockCharts.com
The marijuana news today will be all focused on the stock market, with this week ending on a rough note for several pot stocks.
Starting with CGC stock, we saw an overall decline of about three percent to finish the week.
While it began on a rough note, the mid-week rally had myself and other stock bulls hopeful that mid-June would see strong gains for marijuana stocks.
Unfortunately, however, that was not the case, as Thursday wiped away much of those gains, bringing the stocks back down into the red.
While three percent is not a devastating loss, it’s not exactly the sustainable gains that many marijuana bulls were hoping to see in June, myself included.
Having said that, I do believe that there will be a rally to either close this month or start off July and am therefore not overly concerned with the lackluster performance of Canopy Growth stock and other pot companies so far.
Another company that would have liked to have had a better week was Aurora Cannabis Inc (OTCMKTS:ACBFF, TSE:ACB).
Down about five percent over the past five days, ACBFF stock looks a lot like CGC stock, only its highs were shallower and its lows a bit deeper.
Aurora was hoping to see a boost from its continued aggressive acquisition strategy, this time buying up Anandia Labs in an all-stock deal valued at approximately CA$115.0 million. (Source: “Aurora Cannabis buying Anandia Laboratories in all-stock deal valued at $115M,” Financial Post, June 12, 2018.)
The Anandia Labs acquisition partners Aurora with a research and development company that provides analytical testing for clients licensed under Canada’s medical marijuana regulations.
The company acquisition did not immediately pay off on the stock market, however, and instead we saw a lackluster performance from Aurora to close the week–a recurring theme among marijuana stocks.
The final addition to our roundup also rounded out the short-seller list: Aphria Inc.
Aphria stock has been one of the more volatile this year, and the company continues to battle charges of overvaluation.
While Canopy Growth stock is on the same list as APHQF stock, the two companies fortunes have diverged dramatically in 2018.
CGC stock has gained about 25% year-to-date, while Aphria stock has plummeted by over 40%.
While there rallies here and there, the company has been unable to register significant, sustainable gains, and is down another six percent this week.
The play for Aphria stock is to wait until the bottom hits. But that bottom seems to continually deepen.
In one of our first politics-free marijuana news today in a long time, we’re seeing the market react negatively to marijuana stocks.
Between several companies drawing more attention from short-sellers and the overall decline in share value we saw this week, it appears that June may not be as rosy as my more optimistic projections predicted.
While July and August are where marijuana bulls ought to be focusing on, May was so strong that June appeared capable of carrying that momentum forward.
As it stands, June has been uneven for pot stocks. Marijuana bulls, however, could very well see gains in waning weeks of the month.